Embryonic stem (ES) cells provide an exciting opportunity in the field of regenerative biology and medicine, as they have the unique capacity to differentiate in culture into all somatic cells that make up an individual. Significant efforts have been made in generating functional hematopoietic stem cells (HSCs) from pluripotent stem cells. For instance, expression of HoxB4 (or Cdx4-HoxB4) during in vitro differentiation of ES cells has been shown to derive functional HSCs from ES cells (1-3). Despite these significant advancements, major challenges remain in utilizing in vitro derived HSCs and progenitors for regenerative medicine. For example, hematopoietic engraftment by ES derived hematopoietic progenitors remains consistently and disappointingly low. Even with HoxB4 expression, the frequency of HSCs and progenitors that can repopulate the recipient's hematopoietic system is estimated at best 1 in 2-5x106 among Cdx4-HoxB4 induced ES derived cells (3). Constitutive HoxB4 expression in transplanted cells could also be problematic. The overall objective is to robustly generate functional HSCs from ES and iPS cells. In achieving this goal, we posit that HSCs are generated from ES cells following the same molecular and cellular rules occurring in vivo. To this end, we demonstrated Flk-1 expressing (Flk-1+) hemangioblast, a common progenitor of hematopoietic and endothelial cells (or hemogenic endothelium), derived from in vitro differentiated ES cells can generate hematopoietic cells in culture (4, 5). In addition, we demonstrated that both primitive and definitive hematopoietic systems of the mouse are derived from the Flk-1+ mesoderm (6). Our preliminary studies indicate that when Flk-1+ hemangioblasts were sorted and further differentiated on OP9 cells, we were able to efficiently generate CD41+cKit+CD150+ cells, which have been previously identified as ES derived HSC/progenitors (3). Moreover, temporal co-expression of ER71, GATA2 and Scl positively induced CD41+cKit+CD150+ cells from ES cells: 1) by robustly inducing Flk-1+ hemangioblast formation from ES cells and 2) by independently inducing CD41+cKit+CD150+ cells from Flk-1+ hemangioblasts. Herein, we test a hypothesis that functional HSC generation from ES cells can be greatly improved by temporal ER71, GATA2 and Scl co-expression. We will determine if ES and iPS derived CD41+cKit+CD150+ cells could reconstitute hematopoietic system of the mouse and if temporal ER71, GATA2 and Scl co-expression would be superior to HoxB4 expression in generating functional HSCs. The ability to effectively direct ES and iPS cells to HSCs will provide a novel means of differentiation and will have a major potential impact in the field of regenerative biology and medicine. The outcome will also likely revolutionize the way we envision the cell lineage development and differentiation, thus will also have a major potential impact in the basic research field. Thus, the potential impact is high. PUBLIC HEALTH RELEVANCE: This grant proposal is to achieve directed differentiation of pluripotent stem cells to blood forming stem cells by co-expressing developmentally relevant master genes, which are critical for the generation of blood cells. Successful completion of this proposal is highly significant for basic research and regenerative medicine.